Skincare Industry in Indonesia: Outlook and Opportunities

Indonesia’s skincare industry is one of the fastest-growing segments in the beauty and personal care sector, attracting attention from global investors. With its blend of tradition and modernity, Indonesia offers a dynamic market driven by a young population, increasing disposable income, and heightened awareness of skincare routines. This article explores the industry’s outlook, opportunities, regulations, and steps for entering the market.

Also read: Major Industries in Indonesia (Based on Contribution to GDP)

Indonesia Skincare Industry Outlook

The skincare industry in Indonesia is thriving, with a projected revenue of USD 2.76 billion in 2024 and an anticipated annual growth rate of 4.07% (CAGR 2024-2029). This growth reflects the increasing consumer demand for high-quality skincare products, particularly those that cater to natural and organic preferences. Indonesia ranks as one of the leading markets in Southeast Asia, driven by a young, tech-savvy population and rising disposable income levels.

Facial care dominates the Indonesian skincare market, commanding approximately 57% of the market share, while sun protection emerges as the fastest-growing segment with a 7.8% CAGR. With a per capita revenue of USD 9.88 in 2024, the industry’s growth trajectory highlights opportunities for both local and international players to tap into this dynamic sector.

Also read: Indonesia Beauty Industry: Outlook and Opportunities

Skincare Business Opportunities in Indonesia

The Indonesian skincare industry presents a myriad of opportunities for foreign investors:

1. Product Innovation: Develop natural and organic skincare lines using Indonesia’s abundant resources like aloe vera and essential oils.
2. Halal-Certified Products: Tap into the demand for halal skincare products, which cater to the country’s predominantly Muslim population.
3. Sun Protection Products: Focus on the fast-growing sun protection segment, which has seen significant growth due to heightened awareness about UV damage.
4. E-commerce Expansion: Leverage Indonesia’s thriving e-commerce platforms to reach a tech-savvy consumer base.
5. Luxury Skincare: Cater to the affluent market segment with premium and imported skincare products.
6. Localized Products: Design products tailored to the unique skin types and concerns of Indonesian consumers.

Indonesia Skincare Business Regulation

Foreign investors looking to enter the Indonesian skincare market must navigate its regulatory landscape. The National Agency of Drug and Food Control (BPOM) oversees cosmetic and skincare product registration, ensuring compliance with safety and quality standards. Key considerations include:

1. Product Registration: All skincare products must be registered with BPOM before distribution. The process involves submitting detailed product information, including ingredient lists and safety certifications.
2. Local Partnership Requirements: Establishing a partnership with local entities can streamline regulatory processes and facilitate market entry.
3. Labeling and Advertising Compliance: Skincare products must adhere to strict labeling requirements, providing accurate information on usage and benefits.

Also read: Indonesia Investment Incentives: Government Support for Foreign Businesses

Examples of Skincare Companies in Indonesia

Local brands dominate Indonesia’s skincare market, offering competitively priced and culturally tailored products. Wardah, a leading halal-certified brand, holds a significant share of the market. Other prominent players include:

• Azarine: Known for its innovative sun protection solutions.
• L’Oréal: A global leader that caters to premium market segments.
• SK-II: An imported brand with a strong presence among affluent consumers.

Also read: Top 10 Cosmetic Brands in Indonesia: Beauty Industry Leader

How to Start a Skincare Company in Indonesia

Entering Indonesia’s skincare market involves several strategic steps:

1. Market Research: Understanding consumer preferences, such as the demand for natural and halal-certified products, is crucial.
2. Legal Setup: Register a business entity under Indonesia’s investment laws. Partnering with local stakeholders can expedite this process.
3. Product Development: Leverage Indonesia’s natural resources to create unique formulations that resonate with local and global consumers.
4. Distribution Channels: Utilize both traditional retail outlets and e-commerce platforms to maximize market reach.
5. Regulatory Compliance: Ensure all products meet BPOM standards and acquire necessary certifications before launching.

Also read: Cosmetic Registration in Indonesia: Requirements and Process

Indonesia’s skincare industry offers substantial opportunities for foreign investors. With its robust market growth, expanding consumer base, and increasing preference for natural and innovative products, Indonesia is an attractive destination for businesses aiming to establish a foothold in Southeast Asia. However, navigating the regulatory framework and understanding local market dynamics are critical to success.

If you are considering starting a skincare business in Indonesia, there are a number of resources and support services available to help you get started.

InvestinAsia is among the companies that specialize in aiding you with Indonesia company registration. We boast a team of seasoned experts who can guide you throughout the process of:

• Foreign company / PMA registration in Indonesia
• Indonesia representative office registration
• PT PMDN Set Up
• Virtual office setup in Indonesia
• Business registration number in Indonesia
• Indonesian Business Licenses
• Indonesia Trademark Registration

If you are interested in starting a business in Indonesia, you can start by contacting us for FREE consultation.

Sources:

• Statista
• Research in Indonesia
• YCP
• Jakarta Globe